"Our strong performance in the fourth quarter capped off a pivotal year for Viacom," said Viacom CEO Bob Bakish. "We successfully turned around our core business, with dramatic improvements across our networks, at Paramount and in distribution. We also took important steps to evolve Viacom for the future – investing in our portfolio of advanced marketing solutions, digital and experiential offerings and global studio production business."
He added: "As we head into 2019, we are excited about the company’s evolution and expect to return to [revenue] growth."
The entertainment conglomerate, controlled by the Redstone family, posted adjusted earnings from continuing operations of $400 million, or 99 cents per share, for the latest quarter, compared with $310 million, or 77 cents per share, in the year-ago period. Wall Street had on average forecast 95 cents per share in quarterly earnings.
Fiscal fourth-quarter revenue increased 5 percent to $3.49 billion, driven by double-digit gains at Paramount. Full fiscal-year revenue fell 2 percent to $13.26 billion though.
Following up on the fiscal third quarter's theatrical success of A Quiet Place, Viacom's Paramount film unit had another strong quarter thanks to Mission: Impossible – Fallout. The film unit swung to adjusted operating income of $38 million in the quarter as box office rose 193 percent and licensing was up 3 percent amid continued growth at Paramount Television.
For the full fiscal year, the film unit reported an adjusted operating loss of $39 million after an operating loss of $280 million in the previous year and a loss of $445 million in the year before that.
Viacom's media networks unit returned to U.S. affiliate revenue and adjusted operating income growth in the latest quarter, allowing its adjusted operating profit to rise 2 percent to $708 million. "Lower programming expenses and the company's cost transformation initiative contributed to the first quarter of adjusted operating income growth at media networks in over three years," highlighted Guggenheim Securities analyst Michael Morris.
Quarterly advertising revenue fell 6 percent, including a 4 percent U.S. drop. But Wall Street is likely to focus on the 3 percent U.S. affiliate fee increase for the quarter given that past weakness in that area has been a concern for analysts. "On the affiliate fee side, management is boldly calling for growth (+1 percent) for domestic affiliate revenue, which would be the first quarter of growth in five quarters," Sanford C. Bernstein analyst Todd Juenger had said in his earnings preview.
The company on Friday also highlighted continued success in international markets, saying that its Viacom International Media Networks unit posted record full-year earnings and revenue.
This article was originally published by The Hollywood Reporter.